Building out from the foundation of a beautiful outlook for near-term organic growth, Endeavour Silver
Like a skilled blacksmith, Endeavour will now have multiple irons in the fire from which to arrange its priority targets for future mine constructions, and this latest joint venture option looks like a sweet one. Endeavour will team up with fertilizer and lithium producer Sociedad Quimica y Minera de Chile
The primary "El Inca" asset is known to host silver-lead-zinc sulphide mineralization, including four major vein structures of up to four meters in width "that outcrop for up to 1.6km along strike." Codelco, Chile's state-owned copper miner, encountered average silver grades of 227 grams per ton before mining at El Inca ceased in 1982, and by then Codelco had identified a resource of 7.6 million ounces of silver. Clearly, Endeavour is excited by a perceived exploration potential that would dwarf the asset's modest historical resource.
For that matter, the option agreement also covers two additional properties nearby that were likewise mined historically by Codelco until 1978, and which recorded a combined historical resource of 5.6 million ounces silver at an extremely attractive grade of 523 grams per ton. Together with Endeavour's 2011 options of the La Presidenta and Lomas Bayas properties, Endeavour has amassed a substantial set of attractive development properties in northern Chile. If only one of those prospects yields a deposit as rich in silver as San Bartolome or Pirquitas, Endeavour will have optioned its way into a phenomenal long-term growth trajectory.
Meanwhile, Endeavour is still delivering powerful organic growth, a 31% increase in silver-equivalent production for the second quarter. The company pulled in $7.5 million in profit, and once again took the strategic decision to hold back a portion of mine production from the market until prices improve somewhat. Just as it has done very successfully in recent quarters, Endeavour ended the quarter with a mineral inventory of more than 1.2 million silver-equivalent ounces, which is ready for sale as precious-metal prices inevitably improve.
As production from the El Cubo mine (recently acquired from AuRico Gold
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Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of AuRico Gold and Endeavour Silver. Motley Fool newsletter services have recommended buying shares of Sociedad Quimica y Minera. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.